The fixed factory overhead controllable variance is
A)$73,250 favorable
B)$73,250 unfavorable
C)$59,400 favorable
D)$59,400 unfavorable

Question

Quizplus · Accepted Answer

The fixed factory overhead controllable variance measures the difference between the actual fixed factory overhead incurred and the budgeted amount that was controllable by the management. A favorable variance means that the actual fixed factory overhead incurred was less than the budgeted amount, while an unfavorable variance means that the actual fixed factory overhead incurred was more than the budgeted amount. Since the question states that the variance is $73,250, we can conclude that the actual fixed factory overhead incurred was $73,250 more than the budgeted amount that was controllable by the management, which is unfavorable. Therefore, the correct choice is B, $73,250 unfavorable.

The Fixed Factory Overhead Controllable Variance Is